In plain words: dreaming of a flat in Dubai or London? A resident Indian can buy property abroad — but only within FEMA's rules and the annual remittance limit. Here is how.
Yes, you can — under LRS
Buying immovable property abroad is a permitted capital account use of the Liberalised Remittance Scheme (LRS). A resident individual can remit up to USD 250,000 per financial year toward it, through an AD bank.
How to fund a larger purchase
- Pool family limits — several family members can each remit their LRS limit toward a jointly owned property.
- Spread across financial years — use successive years' limits for instalments.
- Foreign financing — a loan raised abroad against the property can supplement, within the rules.
- Funds held in an RFC account (for eligible persons) can also be used.
Ownership, income and sale
- You can own and hold the property, and earn rent abroad.
- Deal with the rental income as the rules require, and declare foreign assets under tax law.
- On sale, the proceeds should be handled per FEMA (often repatriated or held as permitted).
Traps to avoid
- Exceeding the LRS limit by under-reporting — a contravention.
- Using prohibited channels (hawala) instead of banking channels — serious FEMA and PMLA risk.
- Not declaring the foreign asset in your tax return.
Frequently asked questions
Can my spouse and I both remit for one property? Yes — each can use their LRS limit toward a jointly held property.
Can I take a loan abroad to buy it? Financing abroad is possible within the rules — take advice.
Must I declare the property in India? Yes — foreign assets must be disclosed under tax law.
How Vakil Help Desk helps
Vakil Help Desk advises on FEMA compliance, remittances, NRI matters, foreign investment and compounding — and represents clients in ED FEMA proceedings. If you have a cross-border transaction or a FEMA notice, we can help you get it right.
This article is for general legal awareness, not individual legal advice. FEMA rules, limits and forms are revised by the RBI and the Government from time to time, and the right treatment depends on your facts and the current position. Please consult a professional before acting on a cross-border transaction.